About BOCHK
Bank of China (Hong Kong) Limited ("BOCHK" or "the Company"), the principal operating subsidiary of BOC Hong Kong (Holdings) Limited ("BOCHK Holdings" or "the Group"), is a leading commercial banking group in Hong Kong. BOCHK Holdings was incorporated in 2001 and listed in July 2002 in Hong Kong and is a subsidiary of Bank of China Limited (HK Stock Code : 3988) which holds a 65.77% equity interest in BOCHK Holdings.

We offer a comprehensive range of financial products and services to retail and corporate customers. Our extensive branch network in Hong Kong and the Mainland of China allows us to meet the cross-border financial service needs of Hong Kong and Mainland customers. BOCHK is one of the three note-issuing banks in the HKSAR. Since the end of 2003, BOCHK has been appointed as the Renminbi (RMB) clearing bank in Hong Kong.

The performance of BOCHK since the IPO of BOCHK Holdings in 2002 has been highly successful on various fronts. With the establishment of a strong management structure and corporate governance framework, as well as the development of effective risk management and internal control, we have consistently delivered strong financial results and enhanced shareholder value.

In 2007, the Group produced encouraging results in major business areas and made notable progress in the implementation of its 5-year strategic plan. With our enhanced business model, we succeeded in expanding our core businesses, particularly the high-yield segments, and capturing new business opportunities arising from the robust economy in Hong Kong.

As a result, the Group's 2007 operating profit before loan impairment allowances increased by 32.1% to HK$19,481 million. Total assets reached a landmark level of over HK$1 trillion dollars, reflecting the continuous growth in our business. Total advances to customers registered encouraging growth, particularly, in higher yielding loans including trade finance, SME loans and Mainland lending. The Group's loan quality continued to improve while capital adequacy ratio of Group remained at healthy level.

Moving ahead, the Group will make the most of the successfully implemented Relationship-Product-Channel ('RPC') business model to fortify the leading market position in Hong Kong and to develop a sustainable growth platform. We will also seek to maintain our lead in residential mortgage, loan syndication and Hong Kong RMB banking business.

We will also capture the emerging opportunities through closer cooperation with our parent bank, Bank of China ('BOC'), for mutual gains. A joint venture was formed with BOC to provide back-end service support to BOC Group Bank Card in the Mainland, helping us to strengthen bank card-related services in the rapidly growing Mainland market. BOCHK has also been appointed as the principal bank of BOC Group's Asia-Pacific Loan Syndication Centre. This development will help solidify the Group's leading position while giving us an added advantage in extending our reach to other markets in the Asia-Pacific region.

The growth potential of the China business is a key focus for BOCHK. The Group has adopted a two-pronged approach in which Nanyang Commercial Bank (China) ('NCB China'), the Group's wholly-owned subsidiary, will spearhead its expansion into the Mainland RMB retail banking market while BOCHK will maintain its superior market position in servicing large corporate clients. To support our expansion, we will expand our branch network in the Mainland, to strengthen our manpower and to enhance our franchise. Our Mainland operation will seek to enhance competitiveness in various business segments through product and channel improvement. We will be actively identifying locations in major cities in the Pearl River Delta, Yangzi River Delta and the coastal region to expand its branch network in the Mainland. We will also work closely with BOC in corporate business referrals, the distribution of wealth management products and cross-border banking services.

To reinforce our market position and further improve our performance, we started implementing our 2006-2011 Strategic Plan in early 2006 with the vision to become a top-quality financial services group with a powerful base in Hong Kong, a solid presence in China and a strategic foothold in the region. To realize this vision, we have identified five key strategic areas to focus on: (1) the strengthening of our leading position in Hong Kong; (2) the development of new capabilities in product manufacturing and distribution; (3) the building of a stronger presence in China; (4) the exploration of opportunities for regional expansion; and (5) the promotion of our corporate values and core competencies.

To support the implementation of this strategy, we have introduced a new business model known as the Relationship-Product-Channel Model. This involves the strengthening of customer relationship management, the enforcement of a dedicated product management system, and the optimization of workflow and distribution channels. Through this model, we will enhance the Group's overall operational efficiency and competitiveness. We will be in a better position to develop and expand the range of products and services that are tailored the needs of different customer segments, and to enhance cross-selling through stronger customer relationship management and optimized distribution channels.

The Group is committed to enhancing shareholder value on a long-term basis and providing a stable growth of dividend income to shareholders, with reference to its core earnings performance. Over the past 5 years (2003-2007), the Group's dividend payouts have been in the range between 62.6% and 68.4% of its profit attributable to equity holders, representing dividend yields of 2.8% to 4.9%. Since 2003, a total return for shareholders of 248% has been achieved, as measured by share price appreciation and reinvested dividend as at end December 2007.

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